Oura seeks to raise up to $2.2B in IPO

Dive Brief:

Wearables firm Oura is seeking up to $2.2 billion in an initial public offering, the company disclosed in a Monday securities filing.
While the IPO has not been priced yet, Oura estimates its shares will be valued at $40 to $44 each. Oura plans to offer 13.5 million shares of common stock, and selling stockholders plan to offer 36.5 million shares, for a total of 50 million shares.
Oura is going public as wearables firms grapple with the line between wellness features and medical devices. Oura currently faces a proposed class action lawsuit over the accuracy of its sleep tracking features.

Dive Insight:

Oura makes smart rings that track activity, sleep, stress and other metrics. Currently, none of Oura’s features have been cleared by the Food and Drug Administration as a medical device, as they fall under the agency’s wellness exemption.

However, as makers of the technology look to stand apart from the competition, wearables companies are inching closer to the FDA regulated domain. Oura has said it plans to offer a tool to track nighttime blood pressure trends, which would be considered a wellness feature by the FDA. Separately, the company is working on a study of a feature to surface hidden hypertension risk, which would need to go through the regulator.

Oura has recently added other health features, including letting people upload results from bloodwork. The company has also partnered with Dexcom, which makes continuous glucose monitors, and Resmed, which makes devices to treat sleep apnea and other respiratory conditions.

In its filing, Oura cautioned that there is no guarantee the FDA will determine its features to be exempt from device regulations, and that the agency’s general wellness guidance could change in the future, narrowing the scope of products available for enforcement discretion.

Earlier this year, the FDA changed its wellness guidance without any prior announcement, allowing wearables that measure blood pressure to fall under the wellness exemption if they meet certain requirements.

Oura’s revenue is growing, according to the filing, stemming from sales of its devices and corresponding memberships. The company plans to trade on Nasdaq under the ticker “OURA.”